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This is Why You’re Broke

 

Women entrepreneurs, who work so incredibly hard with gusto and passion, are not living the dream.  Here are my reasons why you’re broke.  Love ’em or hate, I challenge you to make inspired changes around pricing in your business.

1. You Charge Like a Girl

You charge based on what you need, not the value to your client.  That leaves money on the table every time.  Clients hire you because of perceived value to THEM.  So charge accordingly.  If you don’t know how your solution improves your customers life, saves money, cures world hunger or whatever, you got more immediate problems to deal with than your price.  Seriously.

If someone looks pleasantly surprised when they hear your number, guess what? You’re probably under-charging.  Do the research.  Go to the local business library and get friendly with the librarian.  She will be your best market research asset.  She knows where the data is buried and how to read it.  You can reverse-engineer your pricing model.

For instance, say you sell social media services to medical practices to improve their local search marketing.  With a little research online  and off, you could find the largest hospitals  in the area. Find the medical practices surrounding those hospitals.  Then do research on the average household income in the neighborhood.  Calculate what adding 3 new clients would mean to their bottom line and viola, you have the beginning information for figuring out your price.    I did this when I was consulting to HR departments that had manager issues.

And, don’t forget to ask past clients what they valued most about the result you helped them achieve or their interactions with you.  That has value! People will pay to do business with business owners they know, like and trust.  You know that, right?  Maybe too well, which leads me to another reason.

2. You Desperately Want To Be Liked

Enough already with the Sally Field impression...you like me, you really like me.  Hello, this is not a popularity contest.  Too many women hang their self-esteem on whether someone else is buying.  This is gonna sound paradoxical especially if you’re a one person shop but your client isn’t buying you.

They are buying your expertise, your help with a transition that they will make for themselves, not you.  So you don’t need to feel guilty or evil or sad if they don’t like your price. It’s not about you, really.  It’s about the fit and what works for you both.

The best thing to do is change your success model.  You know, how you know you did good.  Being a lawyer, I’m kinda the competitive sort I like to win.  (Board games are banned in our house, looking down sheepishly).  Once I became fully invested in finding creative solutions through mediation, I needed a better standard than win or lose because mediators have to be neutral. We can’t influence the outcomes.

Originally my success model was: did anyone learn anything new about themselves or the other person in the mediation?  (Sometimes that included me- lol)  I felt like something important got accomplished even if the parties didn’t reach agreement.  Now, my model is: did this person feel heard, acknowledged and inspired to take one step farther on their path to success.

3. You Think You’re Someone’s Mother

This applies to you if you feel anxious or uncomfortable with the client spending xxx amount on your services because [fill in the blank]:

  • The economy is bad
  • They have a limited budget or so many expenses
  • They really don’t need it
  • They’re so cute
  • It’s so easy for you; it shouldn’t cost much

I hate to break this to you, but you’re overstepping your role.  Yes, you care about your clients.  Yes, they come to you for your opinion and advice.  However, you have to remember that they are adults who are capable of making their own decisions.  Whether you agree or not.  It’s not your place to decide what they can or can’t afford.  In doing that you  steal their power- their ability to make things happen- and diminish your own.

How many more sales would you close at the price you want if you had a proper pricing conversation with your clients?

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11 thoughts on This is Why You’re Broke Leave a reply

  1. talktherapybiz

    “You charge like a girl.” <–Classic. And trying to be someone's mother is ALWAYS dangerous territory. If your client had a wonderful mother, you'll never measure up + you'll appear incompetent. If client had a lousy mom, client will play you like s/he played mom, and that push-pull dynamic will spew toxicity.

    Wonderful read!

    Thank you.

    Reply
  2. Vanessa

    brilliant! love your style of writing and will re-post to my network of businesswomen in New Zealand. thank you. Vanessa

    Reply
  3. Carrie Smith

    Wow, this is very eye-opening for me. Especially the part about not being someone’s mother. That’s so true! Most of the time I take it upon myself to worry about their pocket book instead of mine. Thanks for the much needed reality check!

    Reply
  4. Lee Caleca

    ‘You Charge Like a Girl’ smacked me right upside the head!! I probably also think like someone’s mother….

    Reply
  5. Melodee Forbes

    Absolutely love this article!! Points #1 and #3 are so true!!! When you think about the value you offer and rate accordingly, everything just works out better than slicing your rate, because someone may be “on a budget” and you need to accommodate. Umm, no. There are products and services for every price point. No need in diminishing your value, because someone else has yet to establish theirs.

    Reply
  6. Eva

    Dear Dina, dear Natalie

    Thank you for this wise and down-to-earth blog post!

    I do have a question about “stubborn” clients. What shall I do with a client who believes that she can do it without my help and save money when in fact she’s not quite capable of handling the area of my expertise as well as I do? I’m a copywriter and communication consultant and for example I have had a client to whom I prepared some website texts but after a while she just decided she “can do it on her own” and she’s been adding texts to her website that definitely have much lower quality than the service I provided. Now I have a bit of dilemma – shall I let her go and make peace with the situation or shall I somehow win her back? ‘Cause the truth is that I cannot use this website as a reference for my future clients as some of the contents on the page are really poor.

    Many thanks in advance for your answer!

    Reply
  7. Dina Eisenberg

    Hey Eva you know the answer. People tell you who they are. How valuable would this person be as a reference, really? Write this off as a lesson. Then, find away to address the original problem- offering an easy way for clients to update or change the work.

    Couple of ideas one to mind. Create a retainer agreement or a club to teach your clients how to make changes on their own. What do you think?

    Reply

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